UnitedHealth joined Humana and CVS Health in cutting back Medicare Advantage plans for 2026 as rising costs and lower federal payments squeeze margins.
UnitedHealth Group shares declined in premarket trading on Wednesday after the health insurer announced plans to cancel its Medicare Advantage offerings in 109 U.S. counties in 2026, affecting approximately 180,000 members.
The decision comes as UnitedHealth and its peers, Humana and CVS Health, move to scale back their Medicare Advantage presence amid mounting cost pressures and lower federal reimbursements.
“The combination of (Centers for Medicare and Medicaid Services) funding cuts, rising healthcare costs and increased utilization has created headwinds that no organization can ignore,” said Bobby Hunter, head of UnitedHealth’s government programs, during a Tuesday press briefing, according to a Reuters report.
UnitedHealth will continue operating in most U.S. states and remains the largest Medicare Advantage provider nationwide, ahead of Humana and CVS’s Aetna business.
However, the company will close more than 100 plans representing about 600,000 members, primarily preferred provider organizations that allow patients to see out-of-network providers.
Hunter stated that most of the plan closures will occur in rural areas, noting that the company is working to develop a sustainable model that can deliver care more efficiently in these communities. The exits are expected to shift more patients toward health maintenance organization (HMO) plans, which typically require in-network referrals.
The move follows a challenging year for Medicare-focused insurers, which faced higher-than-expected service utilization and lower government payments. UnitedHealth missed earnings for the first time since 2008 earlier this year and suspended its full-year outlook after costs surged in its Medicare Advantage segment.
In July, the company warned that regulatory changes would reduce payments for certain conditions, creating a $4 billion profit risk in 2026. It said plan closures affecting roughly 200,000 members could help offset part of that hit.
Hunter added that, compared to 2023, government funding for the program is expected to decline by about 20% by 2026.
Competitors are also retrenching. Humana said it will reduce its footprint to 85% of U.S. counties next year, down from 89% in 2025, while CVS Health’s Aetna division will drop plans in about 100 counties and operate in 43 states and Washington, D.C.
On Stocktwits, retail sentiment for UnitedHealth and CVS Health was ‘bearish’, with ‘low’ and ‘normal’ message volume, respectively, while sentiment for Humana was ‘neutral’ amid ‘high’ activity.
One user noted that the pullback was happening across the board, pointing out that Humana and some Blue Cross plans were also scaling back benefits such as SilverSneakers to prioritize profitability and more substantial margins. The user added that insurers could eventually reenter these markets once conditions improve.
Another user struck an optimistic tone, saying it was time for UnitedHealth to “set sail” toward $1,050.
So far this year, UnitedHealth’s stock has fallen 30%, Humana is down 2%, while CVS Health has surged 77%.
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